If demand and supply are both very inelastic,a decrease in the rate of an excise tax will likely:

A) decrease government revenue.
B) increase government revenue.
C) not affect government revenue.
D) make demand and supply both elastic.

Excise Tax

A direct tax placed on manufactured goods, and is often levied at the time of manufacture, rather than at sale.

Inelastic Supply

A market condition where the quantity supplied of a good does not change significantly when its price changes.

Inelastic Demand

The case in which the price elasticity of demand is less than 1.